Publication:
Sticky Feet : How Labor Market Frictions Shape the Impact of International Trade on Jobs and Wages

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dc.contributor.authorRojas, Diego
dc.contributor.authorHollweg, Claire H.
dc.contributor.authorRuppert Bulmer, Elizabeth
dc.contributor.authorLederman, Daniel
dc.date.accessioned2014-06-26T15:26:21Z
dc.date.available2014-06-26T15:26:21Z
dc.date.issued2014-06-17
dc.description.abstractThis report analyzes the paths by which developing country labor markets adjust to permanent trade-related shocks. Trade shocks can bring about reallocation of labor between industries, but the presence of labor mobility costs implies economy-wide losses because they extend the period of economic adjustment. This report focuses primarily on the adjustment costs faced by workers after a trade shock, because of magnitude and welfare implications and policy relevance. From a policy viewpoint, understanding the relative magnitudes of labor mobility and adjustment costs can help policymakers design trade policies that are consistent with employment objectives, can be complemented by labor policies, or support programs to facilitate labor transitions, or both. To complement and validate the analysis based on structural choice models, the study designed a distinct empirical approach using reduced-form econometric estimation strategies. This approach examines the impact of structural reforms and worker displacement on labor market outcomes. This makes it possible to estimate the time required to adjust to a trade-related shock, but does not assume the rigid underlying relationship inherent in structural models. This report is organized as follows: chapter one gives introduction. Chapter two presents evidence from the literature on the relative magnitude of labor adjustment costs borne by workers and by firms. Chapter three presents a new database of country-level labor mobility cost estimates for both developing and developed economies. Chapter four showcases country case studies in which labor mobility costs vary by industry, firm size, and worker type (for example, informal versus. formal). Chapter five analyzes the impact of structural reforms on aggregate labor market outcomes across countries and the effect of worker displacement due to plant closings on the employment outcomes of individual workers in Mexico. Chapter six concludes with a summary of the main findings about the labor adjustment costs associated with trade-related shocks and a discussion of policy responses internationally.en
dc.identifierhttp://documents.worldbank.org/curated/en/2014/06/19705585/sticky-feet-labor-market-frictions-shape-impact-international-trade-jobs-wages
dc.identifier.doi10.1596/978-1-4648-0263-8
dc.identifier.isbn978-1-4648-0263-8
dc.identifier.other10.1596/978-1-4648-0263-8
dc.identifier.urihttps://hdl.handle.net/10986/18777
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesDirections in Development--Trade;
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACTIVE LABOR
dc.subjectACTIVE LABOR MARKET
dc.subjectACTIVE LABOR MARKET POLICY
dc.subjectADJUSTMENT ASSISTANCE
dc.subjectADJUSTMENT COST
dc.subjectADJUSTMENT POLICIES
dc.subjectAGGREGATE EMPLOYMENT
dc.subjectAGGREGATE GROWTH
dc.subjectAGGREGATE PRODUCTIVITY
dc.subjectAGRICULTURE
dc.subjectANALYTICAL APPROACH
dc.subjectAVERAGE WAGE
dc.subjectAVERAGE WAGES
dc.subjectBUSINESS CYCLE
dc.subjectCAPITAL INVESTMENT
dc.subjectCAPITAL MARKETS
dc.subjectCREATIVE DESTRUCTION
dc.subjectCRISES
dc.subjectDEREGULATION
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDISCOUNTED VALUE
dc.subjectDISPLACED WORKER
dc.subjectDISPLACED WORKERS
dc.subjectECONOMIC COOPERATION
dc.subjectECONOMIC COSTS
dc.subjectECONOMIC FLUCTUATIONS
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC RESEARCH
dc.subjectECONOMIC SHOCKS
dc.subjectECONOMIC STABILITY
dc.subjectEDUCATIONAL ATTAINMENT
dc.subjectEMPLOYMENT
dc.subjectEMPLOYMENT DYNAMICS
dc.subjectEMPLOYMENT GROWTH
dc.subjectEMPLOYMENT INCREASES
dc.subjectEMPLOYMENT LEVELS
dc.subjectEMPLOYMENT OPPORTUNITIES
dc.subjectEMPLOYMENT OUTCOMES
dc.subjectEMPLOYMENT SHARE
dc.subjectENTRY COSTS
dc.subjectEQUILIBRIUM ANALYSIS
dc.subjectEQUILIBRIUM UNEMPLOYMENT
dc.subjectEXOGENOUS SHOCK
dc.subjectEXPECTED WAGES
dc.subjectEXPORT MARKETS
dc.subjectFACTOR DEMAND
dc.subjectFINANCIAL CRISES
dc.subjectFINANCIAL CRISIS
dc.subjectFIRING COSTS
dc.subjectFIRM DYNAMICS
dc.subjectFIRM ENTRY
dc.subjectFIRM SIZE
dc.subjectFORMAL SECTOR WORKERS
dc.subjectGDP
dc.subjectGDP PER CAPITA
dc.subjectGENERAL EQUILIBRIUM
dc.subjectGOVERNMENT INTERVENTION
dc.subjectHOURS OF WORK
dc.subjectHOUSEHOLD SURVEY
dc.subjectHOUSEHOLD SURVEYS
dc.subjectHUMAN CAPITAL
dc.subjectINCOME
dc.subjectINDUSTRY WAGE
dc.subjectINDUSTRY WAGES
dc.subjectINFORMAL EMPLOYMENT
dc.subjectINFORMAL SECTOR
dc.subjectINSURANCE
dc.subjectINTERNATIONAL MARKET
dc.subjectINTERNATIONAL MARKETS
dc.subjectINTERNATIONAL TRADE
dc.subjectJOB CREATION
dc.subjectJOB DISPLACEMENT
dc.subjectJOB SEARCH
dc.subjectJOB SECURITY
dc.subjectJOB SEPARATION
dc.subjectJOB TURNOVER
dc.subjectJOBS
dc.subjectLABOR ADJUSTMENT
dc.subjectLABOR ADJUSTMENT COSTS
dc.subjectLABOR ALLOCATION
dc.subjectLABOR ALLOCATIONS
dc.subjectLABOR COSTS
dc.subjectLABOR DEMAND
dc.subjectLABOR ECONOMICS
dc.subjectLABOR FORCE
dc.subjectLABOR MARKET
dc.subjectLABOR MARKET ADJUSTMENT
dc.subjectLABOR MARKET CHARACTERISTICS
dc.subjectLABOR MARKET IMPACT
dc.subjectLABOR MARKET OUTCOMES
dc.subjectLABOR MARKET REGULATIONS
dc.subjectLABOR MARKET RIGIDITIES
dc.subjectLABOR MARKETS
dc.subjectLABOR MOBILITY
dc.subjectLABOR POLICIES
dc.subjectLABOR REALLOCATION
dc.subjectLABOR REGULATION
dc.subjectLABOR REGULATIONS
dc.subjectLABOR SHARE
dc.subjectLABOUR
dc.subjectLABOUR MARKET
dc.subjectLABOUR MARKET REGULATIONS
dc.subjectLAID-OFF WORKERS
dc.subjectLAYOFFS
dc.subjectLEGAL STATUS
dc.subjectLOCAL GOVERNMENTS
dc.subjectMACROECONOMIC ANALYSIS
dc.subjectMICROECONOMIC ANALYSIS
dc.subjectMIGRATION
dc.subjectNET EMPLOYMENT
dc.subjectNEW ENTRANTS
dc.subjectNOMINAL WAGES
dc.subjectOCCUPATION
dc.subjectOCCUPATIONAL CHOICE
dc.subjectON-THE-JOB TRAINING
dc.subjectOPEN ECONOMY
dc.subjectOPTIMIZATION
dc.subjectPASSIVE LABOR
dc.subjectPLANT CLOSING
dc.subjectPLANT CLOSURE
dc.subjectPLANT CLOSURES
dc.subjectPOLITICAL ECONOMY
dc.subjectPREVIOUS STUDIES
dc.subjectPREVIOUS WAGE
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTION WORKERS
dc.subjectPRODUCTIVE ACTIVITIES
dc.subjectPRODUCTIVITY GAINS
dc.subjectPROFITABILITY
dc.subjectPURCHASING POWER
dc.subjectREAL WAGE
dc.subjectREAL WAGES
dc.subjectREGRESSION ANALYSIS
dc.subjectRETRAINING PROGRAMS
dc.subjectSAFETY
dc.subjectSAFETY NETS
dc.subjectSEARCH COSTS
dc.subjectSERVICE SECTOR
dc.subjectSEVERANCE PAY
dc.subjectSOCIAL CAPITAL
dc.subjectSOCIAL DEVELOPMENT
dc.subjectSOCIAL SAFETY NETS
dc.subjectTOTAL COSTS
dc.subjectTRADE LIBERALIZATION
dc.subjectTRADE POLICIES
dc.subjectTRADE POLICY
dc.subjectTRADE REFORMS
dc.subjectUNEMPLOYMENT
dc.subjectUNEMPLOYMENT BENEFITS
dc.subjectWAGE BILL
dc.subjectWAGE DATA
dc.subjectWAGE DIFFERENTIAL
dc.subjectWAGE DIFFERENTIALS
dc.subjectWAGE EFFECTS
dc.subjectWAGE GAP
dc.subjectWAGE INCREASE
dc.subjectWAGE LEVEL
dc.subjectWAGE SUBSIDIES
dc.subjectWELL-FUNCTIONING LABOR MARKETS
dc.subjectWORK EXPERIENCE
dc.subjectWORKER
dc.subjectWORKERS
dc.subjectWORKING
dc.titleSticky Feet : How Labor Market Frictions Shape the Impact of International Trade on Jobs and Wagesen
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.date.disclosure2014-06-24
okr.doctypePublications & Research::Publication
okr.docurlhttp://documents.worldbank.org/curated/en/2014/06/19705585/sticky-feet-labor-market-frictions-shape-impact-international-trade-jobs-wages
okr.externalurlhttp://www.gbv.de/dms/zbw/787117226.pdf
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeSocial Protection and Labor
okr.globalpracticeFinance and Markets
okr.guid820801468156898298
okr.identifier.doi10.1596/978-1-4648-0263-8
okr.identifier.externaldocumentum000442464_20140624135116
okr.identifier.internaldocumentum19705585
okr.identifier.report88890
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/06/24/000442464_20140624135116/Rendered/PDF/888900PUB0Box30EPI2102630June172014.pdfen
okr.region.countryBrazil
okr.region.countryCosta Rica
okr.region.countryMexico
okr.region.countryMorocco
okr.topicWork and Working Conditions
okr.topicBanks and Banking Reform
okr.topicSocial Protections and Labor::Labor Markets
okr.topicSocial Protections and Labor::Labor Policies
okr.topicEconomic Theory and Research
okr.topicFinance and Financial Sector Development
okr.topicMacroeconomics and Economic Growth
okr.unitChief Economist (LCRCE)
okr.volume1 of 1
relation.isAuthorOfPublicationabab1a02-0f04-5593-b3fb-ec0093c9c5a6
relation.isAuthorOfPublication2c812f70-403a-5905-88e4-bd90a5f31e96
relation.isAuthorOfPublication.latestForDiscoveryabab1a02-0f04-5593-b3fb-ec0093c9c5a6
relation.isSeriesOfPublication706db16a-e556-46f0-8283-1b4a4b88645c
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